You are here

Stretching the School Dollar

Although state tax collections are on the rise, and have returned to 2008 levels in many places, education advocates shouldn’t kid themselves that the “new normal” of flat budgets and tough resource allocation decisions will soon come to an end. Spending on health care entitlements continues to grow rapidly, according to the National Association of State Budget Officers’ most recent report, while K-12 education loses ground as a share of state budgets.

The education reform community needs to think beyond the next levy referendum when it comes to providing resources to our schools. Health care reform — specifically, containing the cost of entitlements like Medicare and Medicaid — has become a major issue impacting American schools. While a few forward-thinking groups like the Massachusetts Business Alliance for Education have grasped this and become active on health care policy in their state capitals, it’s not on most people’s agendas.

Yet the simple arithmetic is unavoidable: Medicaid can’t continue to grow faster than the long-term growth rate of the economy without sucking up more and more of state budgets. Education aid necessarily suffers under any scenario where government continues to pay for rapid, unchecked increases in entitlement spending.

The political reality is equally stark: The AARP and other lobbying groups for recipients of state-financed medical care are very good at protecting these entitlements, and deficit hawks usually form a lonely minority...

State Rep. Matt Huffman is trying to build support for a promising effort to expand private school vouchers to more working-class families in Ohio. In order to appease recalcitrant school districts, whose executives vocally oppose the measure, he may remove any benefit youngsters in wealthier districts could hope to get out of the program, however.

Originally, the bill would have granted vouchers of up to $4,626 based on a family’s economic circumstances. But managers in more than 300 school districts have complained about the possible loss of state and local funding, apparently afraid of competition for students’ dollars from the parochial school down the block. Huffman now wants to limit the amount of each voucher to the total per-pupil aid the child’s school district receives from the state. This means that children in property-rich suburbs, where a growing number of poor families are concentrated, could get just a few hundred bucks a year when they leave for a private school, while many thousands of dollars stay with the school district.

It’s hard to imagine a worse trade-off: Districts get to keep the cash without providing services, while poor and working-class parents in the ‘burbs are forced to scrimp and save even more than their urban counterparts to have some measure of control over their children’s education. Choice-friendly legislators and advocacy groups in Ohio should ask themselves, who are the state’s...

As I was reading Richard Vinen’s op-ed about Margaret Thatcher from this weekend’s New York Times, I couldn’t help but think of Florida’s beleaguered governor. Rick Scott ran as a staunch Tea Partier dead set on getting public spending under control, cutting $1.35B from the state’s education budget last year. With the 2012 elections looming, however, Scott has suffered a crisis of nerves, calling for a billion in new money for education — and no new reforms of note — in an effort to improve his flagging popularity. He has turned to the kind of likability-oriented politics that Thatcher eschewed in her program to remake 1980s Britain.

Scott is not alone. After losing a ballot measure over his signature public-sector reform, Ohio’s John Kasich declared, “It’s time to pause,” despite the fact that voters largely support the education reform portions of the law. Where 2011 was defined by tough discussions about how to balance competing state-level priorities in an era of austerity — with teacher unions frequently on the losing end of those battles — many politicians gearing up for 2012 are striking a softer tone. (By contrast, the bipartisan duo of Chris Christie in New Jersey and Andrew Cuomo in New York have made progress, if haltingly, toward reform of the public sector, and both seem braced for productive work in 2012.)

Charged up by our governance conference last week, Dave DeSchryver says we should open the black box of school finances and shine some much needed light on how school dollars are really spent. This kind of accountability, with some easy-to-use tools along the lines of Mint.com, is sorely needed as education budgets have ballooned out of control.

But hoping that district leaders will be shamed into spending more frugally is not enough. How do I know? Because even when they’re required to report on financial problems publicly, district leaders and politicians are utterly shameless in nearly all cases, tinkering around the edges rather than facing facts.

Take Montgomery County, Maryland. Last week the county released a report showing the school district’s pension costs have increased by 369 percent over the past eight years. The state pays for teacher pensions, but the county is on the hook for everyone else’s plan. The council president claims this is “a huge cause for concern,” but no one is seriously considering changes to build a better retirement system. They’re pushing for quick fixes, increasing teacher contributions to a fundamentally unsustainable program.

School spending needs more than a technical fix. More transparency could help create pressure, and weighted student funding could give parents more perceived “skin in the game” by tying a dollar amount to their own child’s education. In the end, though, we need political...

A major impediment to improving outcomes for disadvantaged children in the nation’s schools is misallocation of the more than $600 billion we spend annually on K-12 education. Marguerite Roza from CRPE and Cindy Brown from the Center for American Progress brought up this very point at our governance conference this morning. (Live feed is here if you want to tune in.)

The Department of Education just released a national study (pdf) confirming with hard data what many experts have said for years: rigid salary schedules established are a major source of inequity within school districts. (It’s important to stress that this is not a “loophole,” but a carefully structured policy embedded in most contracts at the behest of teacher unions.) Here’s CAP’s Cindy Brown in the New York Times:

A few researchers have documented the problem with statewide data in Florida and some other states, said Cynthia Brown, a vice president at the Center for American Progress, a liberal research group. “But I’m excited because this is the first time that data documenting the problem has ever been collected on a nationwide basis,” she said. “Many of us have known for a long time that in some individual districts the high-poverty schools weren’t getting their fair share of state and local funds.”

Two-thirds of schools in the UK were closed for a day recently as
teachers went on strike over proposed changes to pensions. Unions are
trying to force the government’s hand during negotiations over
contributions to the pension system, which has become unaffordable
(there as here in the US) due to rising life expectancy and rules that
permit retirement as early as 55.

“It’s irresponsible to strike while negotiations are ongoing. Many
parents will struggle to understand why schools are closed when the
pension deal on the table means that teachers will still be better
rewarded than the vast majority of workers in the private sector.

“Reforms to public sector pensions are essential – the status quo is
not an option. The cost to the taxpayer of teacher pensions is already
forecast to double from £5bn in 2006 to £10bn in 2016, and will carry
on rising rapidly as life expectancy continues to improve.

Ten Connecticut school districts can produce two high school graduates for the price of one Hartford high school diploma, according to Department of Education data.

The most recent 13 years of education, representing kindergarten through 12th grade, cost $165,275 in Hartford. With a graduation rate of 69.3 percent, the cost per diploma in Hartford is $238,492.

In 2010, Hartford’s costs were less than double the costs of the most efficient school districts.

Presumably, students who drop out gain some benefits from their schooling, even if they don’t receive a degree. But a partial high school education is not much of an asset in the labor market relative to completion of a rigorous secondary program and vocational training. This analysis reveals just how much of Hartford’s K-12 investment is being squandered for likely little gain in outcomes for kids who don’t make it to graduation day.

The Yankee Institute’s analysis reveals an important side of the “doing more with less” coin: Schools that can deliver higher quality and better outcomes for the same level of spending should be highlighted as best practices just as should schools that are able to trim expenses and achieve the same level of quality. Hopefully Hartford and other low-efficiency districts in Connecticut can look to their more productive peers for strategies to increase their...

“The rapidly rising fees give us all heartburn,” said Gibor Basri, the vice chancellor for equity and inclusion at Berkeley, who has met with the protesters several times. “We don’t believe that higher education is a private right but a public good.”

The funding challenge in higher ed has implications for K-12 spending as well. Society has a responsibility to fund education — both to provide equality of opportunity for all children and to develop human capital for the improvement of civic life and our economy. But what to do when taxpayers have already provided massive increases in funding after inflation over a sustained period, as they have for K-12 over the past several decades?

We can’t afford to focus only on the revenue side of the equation anymore if our goal is to ensure that quality education remains a public good. Just as taxpayers have their responsibility for this good, so, too, do service providers entrusted with public dollars: teachers, administrators, and school boards. When these folks avoid having tough conversations about efficiency, they weaken society’s promise of a free, top-notch education for all.

As school levies fail across central Ohio, I am concerned and disappointed to see so many school districts quickly threaten to reduce the quality of our children’s education. Providing an excellent education for our children may be the single most important thing we can do as responsible citizens.

To give hope to our children in tough economic times, we must learn to do more with less. When I read the statement made by Westerville’s school-board president, “We’ll be looking at state-minimum requirements,” I lost confidence in the leadership of the district in which I live. As the operator of the Columbus Collegiate Academy, a charter school on the Near East Side, I run a school on a shoestring budget. Unlike traditional district schools, we don’t have access to local property-tax dollars.

When I see levies on the ballot, I can only dream about what we could do for our students, 94 percent of whom are minorities and 88 percent of whom are economically disadvantaged, with additional revenue. Although it is unlikely we ever will receive public revenue at the same level as others, we would never settle for providing our students with “state-minimum requirements.”

Our system doesn’t fund schools, and certainly doesn’t fund students. Yet to encourage development and improvement of technology-based methods, we must find ways for public dollars to do just that—and to follow kids to online providers chosen by their parents, teachers, or themselves.

The paper, released Wednesday, argues that unlocking the vast potential of digital learning requires streamlining funding into a “backpack” model where dollars follow individual students, allowing families to select from a robust and diverse range of digital and traditional educational options. Download the paper to find out more, and explore experts’ reactions on Flypaper....

SIGN UP for updates from the Thomas B. Fordham Institute

National

Ohio

Our Blogs

About The Editor

Director of Finance and Operations;

Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.